Semtech Corporation Announces Upsize and Pricing of Private Offering of $300 Million of New Convertible Senior Notes

Semtech Corporation (Nasdaq: SMTC) (the “Company” or “Semtech”) today announced the pricing of its private offering of $300 million in aggregate principal amount of its 1.625% convertible senior notes due 2027 (the “Notes”) in a private placement (the “Offering”) to eligible purchasers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). The Offering was upsized from the previously announced offering of $250 million aggregate principal amount of Notes. Semtech has granted the initial purchasers of the Notes an option to purchase, for settlement within a 13-day period from, and including, the date on which the Notes are first issued, up to an additional $37.5 million aggregate principal amount of Notes. The sale of the Notes is expected to close on or about October 12, 2022, subject to customary closing conditions, and is expected to result in approximately $290.0 million in net proceeds to the Company, after deducting the initial purchasers’ discount and estimated offering expenses payable by the Company (assuming no exercise of the initial purchasers’ option) but before deducting the net cost of the convertible note hedge and warrant transactions referred to below.

Semtech expects to use approximately $27.8 million of the net proceeds from the Offering to pay the cost of certain convertible note hedge transactions described below (after such cost is partially offset by the proceeds to Semtech from the sale of certain warrant transactions described below). Semtech intends to use the remainder of the net proceeds of the Offering, together with the borrowings under the term loan facility, revolving credit facility and available cash and cash equivalents, to finance the purchase price for Sierra Wireless, Inc. (“Sierra Wireless”) and to pay related fees and expenses in connection with the acquisition of Sierra Wireless (the “Acquisition”). In the event the Acquisition is not consummated, Semtech will use the remainder of the net proceeds from the Offering (after paying the cost of the convertible note hedge transactions, after such cost is partially offset by the proceeds to Semtech of the warrant transactions) to fund a portion of the redemption price of the Notes (as described below) or for general corporate purposes.